The stock market has been a hot topic lately. Its volatility (wide value ranges, from high to low) was in full swing in February and March. Social media frenzies pushed some novice investors to buy low-value stocks in an effort to drive up the prices. The results shocked veteran investors who protested and sought to freeze trading. For many, all the hoopla raised questions: How does the stock market even work? Should I buy stock?
In simple terms, the stock market is a system of buying and selling shares of ownership in a company. Companies sell stock to raise money for growing their businesses. People buy stocks as long-term investments or to earn cash. Stock prices rise and fall throughout business hours, every day, Monday through Friday. Investors make money by selling their shares at a higher price than they originally paid. Carrie Schwab-Pomerantz is a financial literacy expert and senior vice president at Charles Schwab & Co. She says, “Investing is a means of using your money to try to create more money.”
“Playing the market,” as it’s called, can be a good opportunity when done responsibly and with guidance. But one should approach investing while striving to be good—even shrewd—stewards. Believers must not be greedy for quick gain or self-serving with their profits. But buying and selling well are biblically affirmed activities.
WORLD reporter Emily Belz shared with WORLDteen how her dad led her into responsible investing. He gave her a small amount of money and then explained the risks inherent in the market system.
Emily says her father advised “that I should put the money in expecting that I might lose all of it.” (One must never invest more than one can afford to lose.) Emily chose a company she was familiar with. That company was Apple. “It turned out to be a smart gamble,” says Emily. “I sold it in college . . . and made some money. But not as much as if I had held onto it!” (In 2000, Apple shares sold for about $1 each. Today, Apple stock is worth more than $100 per share.)
God encourages good economic stewardship. He sets up economies and works in markets and commerce settings. Jesus gives an example of making use of investment opportunities in Matthew 25:14-30. And God mightily used Lydia, a merchant in Philippi who was busy in the common marketplace. Through her business there, she not only earned money to support a household, but she made contacts that helped the new church grow and spread in the Gentile world.
Godly economic management isn’t reflected only in how much we individually profit. It is evident also in how our participation benefits others in God’s bigger plan.